In the United States, a Suspicious Activity Report (SAR) is a document which a financial institution such as a bank, credit union, or money services business is required to file if it believes that a customer's behavior is suspicious. Filing SARs is required under the terms of the Bank Secrecy Act, passed in 1970, with the reports being directed to the Financial Crimes Enforcement Network. When such reports are filed, the customer under suspicion is not notified.
Financial institutions can file Suspicious Activity Reports electronically, via paper forms, or on storage media such as discs. The report must be filed within 30 days of the discovery of facts which suggest that a customer's activity is suspicious. It can be initiated by any employee, such as a teller or manager, and the originating employee does not discuss the SAR with coworkers unless it is absolutely necessary.
Certain events can trigger an automatic Suspicious Activity Report and in other cases people are expected to use their judgment when it comes to determining whether or not a report should be filed. As a general rule, if someone suspects that money laundering, movement of money to support terrorist activities, or fraud is occurring, there is an obligation to file a SAR. For example, if someone routinely brings in sacks of cash for deposit and does not own a business, this could be grounds for filing a report. Likewise, if someone engages in a transaction and then suggests that there will be a reward for not filing a Suspicious Activity Report about it, this would trigger a filing.
The report includes details about the financial institution, the customer, and the activity deemed suspicious. Once it has been filed, additional investigative steps may be taken to clear the matter up or to collect evidence which can be used in a prosecution. The data is also used in a database which collects information about patterns across the financial industry. These patterns can be used in further investigations and in analysis of banking activities to look for warning signs, with law enforcement trying to keep up with current trends in money laundering and fraud.
If someone engages in activity which results in a Suspicious Activity Report and the activity is actually innocent, this will be revealed during investigation. There may be entirely legitimate reasons for people to do things which look peculiar to bank personnel. It is advisable for people who know that their banking patterns will be changing to alert the bank to avoid triggering such reports. For example, if someone is going to start receiving remittances from overseas from a family member who is working in a foreign company and the bank is alerted ahead of time, it will not be alarmed by the deposits.
